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Growers optimistic ahead of special session

Copyright © 2021 Albuquerque Journal

After a proposal to legalize recreational cannabis burned out at the end of the legislative session earlier this month, growers in New Mexico’s medical cannabis industry are optimistic that the proposal will have better luck during this week’s special session.

“This is the best shot we’ve had so far,” said Indy White, director of sales for PurLife Dispensary and president of the board of the New Mexico Cannabis Chamber of Commerce.

Still, industry leaders agree that some details need to be agreed on during the session, which is scheduled to begin Tuesday, from license caps to a start date when adults without a medical card will be able to purchase cannabis.

“If legalization isn’t handled correctly, you’re going to see a lot of outside corporations coming into New Mexico with capital … that won’t allow New Mexicans to really take advantage of this industry,” said Willie Ford, founder of R. Greenleaf Organics.

Recreational cannabis legalization came closer to becoming law than it has previously in New Mexico, as House Bill 12 made it out of the Senate Judiciary Committee before dying when the session ended March 20. For advocates, how close the bill came to approval brought frustration but also optimism that the work could be finished during the special session announced by Gov. Michelle Lujan Grisham.

“I really do believe that the votes are there, and I think it’s the smart thing to do,” said Ben Lewinger, executive director of the Cannabis Chamber.

Lewinger said he expects work during the special session to build on a framework of HB12.

An amended version of the bill would allow the New Mexico Regulation and Licensing Department to limit the number of licenses issued to ensure market equilibrium.

Caps on licenses and plant counts remain contentious in the cannabis industry. Wylie Atherton, head grower at Seven Point Farms, said capping production would help New Mexico avoid growing more cannabis than customers could consume. Atherton pointed to Oregon, which legalized recreational cannabis without a cap on the number of licenses, as a cautionary tale for New Mexico. Atherton, who worked in Oregon’s cannabis industry during legalization, said the state’s industry developed a massive oversupply, which caused prices to plummet and forced smaller growers out of business.

“It was extremely devastating for an already established, pretty grassroots industry,” Atherton said.

Duke Rodriguez, president and CEO of Ultra Health, the largest chain of dispensaries in New Mexico, has pushed for looser restrictions and said he wants to avoid an environment in which growers in the state can sell their licenses for profit without investing in their production.

Rodriguez said he believes New Mexico is at a greater risk of growing too little legal cannabis than too much.

“I think there is clear evidence that (oversupply is) unlikely to happen in New Mexico,” Rodriguez said.

Another point of contention in a potential legalization bill would be when the recreational program should begin operation. Rodriguez said he believes the state would be best served by starting recreational sales soon, possibly by this fall. He said having it in place by then would give the industry a chance to capitalize on – and market to – an influx of tourists associated with large events like the New Mexico State Fair and Albuquerque International Balloon Fiesta. The amended version of HB12 would have prohibited public consumption of cannabis outside state-designated cannabis consumption areas.

Ford, on the other hand, has pushed for a longer period before legalization goes into effect. Ford said that it would take about a year to scale up production to meet the needs of a recreational market and that opening sales in 2021 could jeopardize access for medical patients.

“That will be our No. 1 concern, is making sure there’s a healthy timeline that protects medical patients’ access to medicine,” Ford said.

Each of the producers stands to benefit from legalization, but they’re taking different approaches. Atherton said Seven Point Farms would favor a “low and slow” approach over scaling up production quickly.

“We’re probably on the more cautious side of things,” Atherton said.

Ultra Health and PurLife, on the other hand, have made significant investments already in the hopes that recreational cannabis would pass. Rodriguez cited public studies that a mature recreational market would generate more than $600 million in sales and employ up to 15,000 people, and said he hopes Ultra Health could be responsible for as much as 20% of those totals.

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